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By Mark Caine, Research Officer at the London School of Economics, Coordinator for the Hartwell Group, and 2010 Breakthrough Generation Fellow.

[Originally published December 13, 2011; Updated and republished February 14, 2012]

UPDATE:

The Federation of Electric Power Companies, an industry group representing Japan's largest electric utilities, has just released new data on Japanese fossil fuel imports for January 2012. The data reveal that last month, despite an overall drop in economy-wide energy use, Japan imported and consumed far larger quantities of fossil fuels than it did in January 2011, before its earthquake, tsunami, and nuclear disaster updended its economy and energy system.

In January 2012, consumption of fuel oil, crude oil, and LNG were up 118%, 115%, and 27% respectively compared to January 2011 figures. To meet surging demand for these fossil fuels, Japanese utilities increased imports of fuel oil by 165%, crude oil by 174%, LNG by 39%, and coal by 12%. It appears that much of this fuel was used for thermal power generation, which rose 29% in January 2012 compared to January 2011 levels.

Already, the high cost of these fossil fuel imports has contributed to Japan's newfound trade deficit of $32 billion, the country's first in over 30 years.

ORIGINAL POST:

In May, Japan's previous Prime Minister Naoto Kan cancelled the nation's plans to expand nuclear generation to meet 50% of its power needs by 2030. His announcement raised immediate questions about how Japan would meet its present and future electricity demand and whether it could do so without abandoning its commitment to reduce CO2 emissions to 25% below 1990 levels by 2020.

As an earlier Breakthrough Institute analysis noted, Japan has run out of easy energy options. Replacing nuclear with wind and solar is prohibitively expensive (even assuming continually declining per-Watt costs), and Japan is reluctant to scale up geothermal or damage its trade surplus by importing large quantities of foreign fossil fuels.

Now, new signs are emerging to show which bitter pill Japan might ultimately swallow. Last month, Japanese electric utility TEPCO published an estimate of its fuel needs for the period March 2011 to March 2012. Best known as the largest electric utility in Japan and the owner and operator of the stricken Fukushima Daiichi nuclear plant, TEPCO has released hard data indicating that Japan is replacing its lost nuclear capacity primarily with coal, gas, and oil.

The below chart shows TEPCO's actual oil, gas, and coal consumption for the period March 2010 to March 2011, its projected consumption of each fuel for the period March 2011 to March 2012, and the percentage change between the two. In each case TEPCO's data shows consumption rising, with coal increasing 5.3%, gas 16.1%, and oil 77.7%.

Given Japan's lack of domestic oil and gas resources, TEPCO can only meet its demand for these fuels by importing them from abroad. Calculated based on average global prices for oil and recent Japanese prices for LNG (Japan's principle form of imported gas), importing these fuels will cost TEPCO $5.2 billion in the 2011-2012 period, equivalent to 11.1% of Japan's average annual trade surplus of $46.6. And that's just TEPCO, which represents only 28 million of Japan's 128 million people, or 22% of Japan's electricity customers. It does not include other large utilities such as Chubu Electric Power and Tohoku Electric Power, which have also shut down nuclear capacity, replaced it with imported fossil fuels, and joined in the erosion of Japan's coveted trade surplus.

The consequences of TEPCO's dash to fossil fuels go beyond economics: the move is also complicating the company's plans to cut carbon emissions to a yearly average of 20% below 1990 levels for the period 2008-2013. One company spokesman has already said that "conditions are too tough to meet that goal", and the company recently announced it is "reviewing" its targets. If other large utilities follow suit and cancel or fail to meet their targets, Japan's already ambitious goal of lowering emissions to 25% below 1990 levels by 2020 will become even less tenable. Indeed, as previous Breakthrough analysis showed, if Japan replaces its 14 planned nuclear reactors and the 38 reactors assumed to be retired by 2030 with gas- or coal-fired generation, the country's annual emissions could spike by 15% and 26% respectively.

As Japan's fossil fuel imports and carbon emissions keep rising, it's important to remember that Japan's predicament is no fault of its own. In the wake of the nation's triple catastrophe of earthquake, tsunami, and nuclear crisis, TEPCO and Japan's renewed embrace of fossil fuels should not be interpreted as a weakness of will on the part of Japanese business or government.

Rather, it is further proof of the same inescapable reality we're seeing in Germany as it begins phasing out its nuclear fleet: in the absence of major mitigating factors, reducing nuclear generation appears most likely to lead to either the import of nuclear or fossil power or increased domestic fossil fuel consumption and a corresponding increase in carbon emissions.